The Dow Jones Industrial Average rose 104.95 points, or 0.29 percent, to 36,157.58. The S&P 500 added 29.92 points, or 0.65 percent, to 4,660.57. The Nasdaq Composite Index increased 161.98 points, or 1.04 percent, to 15,811.58.
Eight of the 11 primary S&P 500 sectors ended in green, with consumer discretionary up 1.84 percent, leading the gainers. Energy slipped 0.83 percent, the worst-performing group.
U.S.-listed Chinese companies traded mostly higher with nine of the top 10 stocks by weight in the S&P U.S. Listed China 50 index ending the day on an upbeat note.
The Fed announced on Wednesday that the central bank will start tapering its asset purchases later this month amid great concerns over elevated inflation levels.
"Inflation is elevated, largely reflecting factors that are expected to be transitory. Supply and demand imbalances related to the pandemic and the reopening of the economy have contributed to sizable price increases in some sectors," the Federal Open Market Committee (FOMC), the Fed's policy-making committee, said in a statement after a two-day policy meeting.
In light of the "substantial further progress" the U.S. economy has made toward the Fed's goals since last December, the committee decided to begin reducing the monthly pace of its net asset purchases by 10 billion U.S. dollars for U.S. Treasury securities and 5 billion dollars for agency mortgage-backed securities, according to the statement.
Meanwhile, the Fed included the usual caveat that the taper pace could change if the FOMC deems it advisable.
"The FOMC statement was almost unchanged in November with the exception of a taper to begin in November and to follow exactly the path laid out in the September minutes," Chris Low, chief economist at FHN Financial, said Wednesday in a note.
"The tweak to the inflation language does not change the meaning but offers an explanation of the transitory factors the Fed believes underlie inflation pressures," he said.
On the economic front, the Institute for Supply Management (ISM) said its services index jumped to a record 66.7 percent in October, higher than analysts' expectation and up from 61.9 percent in September. Any reading above 50 percent indicates the services sector is generally expanding.
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